Two IPOs to Test Investor Views of Bad Debt at Chinese Banks

Investors Wary of Rising Volume of Bad Loans

HONG KONG—Two initial public offerings planned for Hong Kong will gauge investors' views on just how much bad debt is weighing on China's banking system.

China Everbright Bank Co. is planning a US$2 billion listing in December, in the mid-tier bank's third attempt at going public in Hong Kong in as many years, and what would be the third IPO by a Chinese bank in recent weeks. Meanwhile, China Cinda Asset Management Co., which buys soured loans from Chinese banks, is also seeking investor feedback on its first-of-a-kind...